Auditor: State-funded ‘job incentives’ go to Chittenden County businesses that would not have left Vermont

By Guy Page

At least three-quarters of the businesses taking government employment incentive money to stay in Vermont would not have left the state regardless, a study by Vermont Auditor Doug Hoffer concludes.

Furthermore, prosperous, well-employed Chittenden County derives more employment benefit from these programs than the rest of the state combined.

In other words, enticing businesses with public money to come to Vermont or not leave just doesn’t work most of the time, Hoffer says. Either the money isn’t the determining factor — it’s a nice “if you’re offering, I’m taking” benefit — or the company takes the money and moves anyway.

Hoffer for Auditor

Vermont State Auditor Doug Hoffer

Hoffer cites national expert Timothy Bartik’s conclusion about paying companies to come, go, or stay as desired by the state: “Typical incentives probably tip somewhere between 2 percent and 25 percent of incented firms toward making a decision favoring the location providing the incentive. In other words, for at least 75 percent of incented firms, the firm would have made a similar location / expansion / retention decision without the incentive.”

The counter-argument against Hoffer’s criticism of the Vermont Employment Growth Intitiative (VEGI) is that the $51 million shelled out over the years has helped businesses that otherwise would have left Vermont or never come — resulting in drastic losses of revenue. But the 2-25% effectiveness of incentive funding shows that’s just not so, Hoffer claims.

The cost of VEGI and a related program over the last 22 years is approaching $91 million — not including the cost of administration, which Hoffer says is “not insignificant.” Average grant amount: $852,000.

The study also reports the geographic bias in job creation. In 2020, more than half are in Chittenden County. “To some extent, this is not surprising. But it calls into question the extent to which this program is a useful tool in the effort to address the urban — rural disparity in Vermont’s community and economic development,” Hoffer says.

There are no active or complete applications in five of Vermont’s 14 counties, including Addison, Bennington, Essex, Grand Isle and Rutland. Instead, 22 VEGI awards are (and have been) concentrated in the fastest growing parts of the state, Hoffer said.

Hoffer also points to an economic development official’s worst embarassment: a company taking millions and then laying off scores of employees. That’s exactly what happened in November 2019, when a California company, Marvell, accepted $5.3 million to build its workforce at the Global Foundries site in Essex Junction — and one day later laid off 78 Vermont workers.

According to Hoffer, the leadership at VEGI overseer Vermont Economic Progress Council was asked to respond to the substance of the report. VEPC sent a brief letter alleging “misrepresentations” and questioning the point of the report, but did not specifically rebut anything in the report.

Read more of Guy Page’s reports. Vermont Daily is sponsored by True North Media.

Images courtesy of Flickr/401kcalculator.org and Hoffer for Auditor
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11 thoughts on “Auditor: State-funded ‘job incentives’ go to Chittenden County businesses that would not have left Vermont

  1. None of this would’ve been necessary if government hadn’t exerted totalitarian control of all our lives.

  2. Here is something the 112,704 could get behind.

    Open season on terrible use of money. Just follow and look for grants. Expose them every time and publicly hang it up in a tree for all to see.

    We spend $45,000 on engineering for a couple park benches, plantings and stone work on about 400 sq ft of rock. This is NOT an exaggeration. We called it out an immediately got banned from Front Porch Forum.

    Yeah….the 112,704 who voted for Trump would have a field day on this. All the VTGOP needs to do is activate and coordinate. These are competent, polite people.

  3. Chittenden County is the most Liberal corrupt county in VT They control VT with their power in Montpelier. The remainder of VT are their serfs. A surprise?

    Start by having two Senators per county, not the six in Chittenden because:
    power corrupts; absolute power corrupts absolutely’

  4. Amazing article Guy!

    GRant money = wasteful spending
    Grant Money = crony capitalism

    Crony capitalism is socialists first cousin.

    No town would spend ANY grant money if they had to match it 50% the ideas are generally speaking nobody would spend their own money on them.

    • Its really shameful when you know about all the other places that money could have gone where it would have actually worked.

      Every small business out there has the ability to become a big business with some well designed support- which this could have been.

      Letting the fox rule over the chickens is certainly not going to produce good results..

  5. That money was stolen from hard-working, over-taxed, over-regulated, oppressed Vermonters, and handed by politicians to their friends, who will reward those politicians with various forms of “campaign contributions” under the table.

    You think Joe Biden is the only self-serving politician?
    Vermont is loaded with them!!

    Vermont was voted one of the least open states, which means it is one of the most under-the-table states.

    • Not only that, that lack of transparency means they have done a good job in hiding all of that corruption.
      While that lack of transparency is not good for the regular people in Vermont, it certainly is like a gold star on the forehead for those that operate in the dark- and benefit from that.
      That ranking was like an award for them, job well done in their minds.

  6. Welcome to Vermont: why would anyone want to burn oil, natural gas, or propane to stay warm, since we obviously just have money to burn.

    • Awesome, lol. We’ll all be warm this winter, perhaps this is Vermont true answer to climate change! We could immediately drop our carbon foot print by 90%!

      Vic you solved Vermont global warming! It can be done in 30 minutes today!

      I’m nominating you for the Noble Peace prize…you have saved the world!

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